You have probably heard the term “bulk foreclosure" and wondered what this could be. This term refers to an investment made by someone who is buying up property foreclosures in a certain area or that are held by a particular lender. As with most purchases in life, whether it's for chocolate or real estate, they will get a better deal by buying in bulk.
Investors often do this so that they can fix the property up and sell them to buyers. Those who are buying in bulk are either investors who are seeking a massive rehabilitation of houses and have the money to fix up numerous homes, or are planning on buying up blighted property, tearing it down and then building a shopping center. Many developers seek to buy in bulk because they can get them cheaply and then create a shopping center.
Although foreclosures have hit an all time high in the United States, there are still people who are investing in these homes. They are either renting the properties out to those who need a place to live, rehabbing them so that they can sell them, or are developing the land that the property sits on.
In the city of Chicago, there is much blighted area in the south side of the city. Much of this land is being purchased by developers who, after making deals with politicians in the city, tear down the residential area and then get it rezoned for commercial or multi-family use. Many blighted areas in the city have been torn down and are now considered to be the upscale neighborhoods. Chicago is one of the cities in the United States that is bound and determined to get rid of any unsightly slum areas and is revamping them with million dollar town homes or high rises.
Most people who buy a block of foreclosures, however, find that they are scattered throughout the city. If they are interested in a certain piece of property, they may have to buy the entire block if it is included in a package deal.
Because there are so many foreclosed properties on the books of lenders, many of them are packaging them together for large investors. This saves the banks time and gets more properties off their hands. Many investors will split these packages up and sell off houses individually to other investors at a small profit, keeping those that they feel have the most potential.
California, Florida and Nevada are the three states where you will see the most foreclosures. In some areas, there are entire neighborhoods of new homes that have not even been occupied as the developer went bankrupt. Those who believe that the market will rebound and want to hold onto these homes for future potential can consider buying them in a bulk deal and save even more money.
The Investor's Paradigm (http://investingcashflow.com ) offers information on how to successfully invest in a bulk foreclosure . Billings Farnsworth is a freelance writer.